HEI, Inc. (Pink Sheets:HEII)(http://www.heii.com) today announced unaudited financial results for the first quarter of 2014, which ended March 29, 2014.
Sales in the first quarter of 2014 were $5,944,000, compared to $12,516,000 in the first quarter of 2013. The Company generated a net loss of $896,000 in the first quarter of 2014, compared to a net income of $636,000 in the first quarter of 2013.
Sales declined 53% in the first quarter 2014, compared to the first quarter 2013, as a result of decreased sales in all three of the Company’s operating divisions.
“As mentioned in our fourth quarter press release, orders had been delayed and reduced for the military radio system components in our Victoria division due to delays and reductions in government procurement. Although a limited number of follow on orders have been received in the first quarter of 2014, no assurances can be made as to whether or not additional orders will be received in 2014 and, if received, the volume and timing of any shipments. Revenues were down year over year in our Boulder operation due in part to one-time test systems built in that facility in the prior year. Tempe revenues were down year over year due to reductions in orders for customer legacy products and delays in qualification of new programs for existing customers and new customer programs.” said Mark Thomas, CEO.
HEI, Inc. designs, develops and manufactures ultra-miniature microelectronics, high density interconnect flexible and rigid-flex substrates, electromechanical hardware, and embedded software with complex user interface solutions for customers engaged in the medical, hearing, telecommunications, military, aerospace, and industrial markets. HEI provides its customers with a single point of contact that can take an idea from inception to a fully functional and cost effective product utilizing innovative design solutions and by the application of state-of-the-art materials, processes and manufacturing capabilities.
| Corporate & HEI –Victoria (Microelectronics Contract Manufacturing) | 1495 Steiger Lake Lane, Victoria, MN 55386 | |
| HEI – Boulder (Design and Development, Box Build and ATE) | 4801 North 63rd Street, Boulder, CO 80301 | |
| HEI – Tempe (Quick Turn and Production High Density Interconnect Flex and Rigid-Flex) | 610 South Rockford Drive, Tempe, AZ 85281 | |
FORWARD LOOKING INFORMATION
Information in this news
release, which is not historical, includes forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 that involve substantial risks and
uncertainties. You can identify these statements by forward-looking
words such as “may,” “will,” “expect,” “anticipate,” “believe,”
“intend,” “estimate,” “continue,” and similar words. Statements
contained in this press release, including the implementation of
business strategies, growth of specific markets, results and estimated
HEI revenue, orders, shipments, cash flow and profits, are forward
looking statements. All such forward-looking statements involve risks
and uncertainties including, without limitation, adverse business and
market conditions, the ability of HEI to secure and satisfy customers,
the availability and cost of materials from HEI’s suppliers, HEI’s
ability to satisfy financial or other obligations or covenants set forth
in its financing agreements, adverse competitive developments, change in
or cancellation of customer requirements, collection of receivables and
outstanding debt, HEI’s ability to control fixed and variable operating
expenses, and other risks detailed in previous HEI SEC filings. Since
HEI is no longer reporting to the SEC, readers are cautioned to weigh
the potential for additional risk factors based on ongoing business
activities and the current economic conditions. The information set
forth herein should be read in light of such risks. We undertake no
obligation to update these statements to reflect ensuing events or
circumstances, or subsequent actual results.
| HEI, INC. | ||||||||||
| BALANCE SHEETS (UNAUDITED) | ||||||||||
| March 29, 2014 | March 30, 2013 | |||||||||
| (In thousands, except share and per share data) | ||||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | - | $ | - | ||||||
| Accounts receivable, net | 3,557 | 5,547 | ||||||||
| Inventories, net | 3,580 | 5,722 | ||||||||
| Other current assets | 599 | 347 | ||||||||
| Total current assets | 7,736 | 11,616 | ||||||||
| Property and equipment: | ||||||||||
| Land | 216 | 216 | ||||||||
| Building and improvements | 4,342 | 4,337 | ||||||||
| Fixtures and equipment | 31,044 | 28,784 | ||||||||
| Accumulated depreciation and amortization | (28,931 | ) | (27,429 | ) | ||||||
| Property and equipment, net | 6,671 | 5,908 | ||||||||
| Security deposit | 215 | 230 | ||||||||
| Other long-term assets | 162 | 192 | ||||||||
| Total assets | $ | 14,784 | $ | 17,946 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Revolving line of credit | $ | 2,809 | $ | 4,273 | ||||||
| Accounts payable | $ | 2,308 | $ | 3,387 | ||||||
| Accrued liabilities | 748 | 1,383 | ||||||||
| Customer deposit liabilities | 7 | 119 | ||||||||
| Current maturities of long-term liabilities | 1,009 | 1,124 | ||||||||
| Total current liabilities | 6,881 | 10,286 | ||||||||
| Long-term liabilities: | ||||||||||
| Long-term lease obligation, less current maturities | 1,674 | 1,816 | ||||||||
| Long-term capital lease obligations, less current maturities | 876 | 567 | ||||||||
| Long-term debt, less current maturities | 848 | 1,371 | ||||||||
| Total long-term liabilities, less current maturities | 3,398 | 3,754 | ||||||||
| Total liabilities | 10,279 | 14,041 | ||||||||
| Commitments and contingencies | ||||||||||
| Shareholders’ equity: | ||||||||||
| Undesignated stock | - | - | ||||||||
| Convertible preferred stock, $.05 par | 2 | 2 | ||||||||
| Common stock, $.05 par | 529 | 513 | ||||||||
| Additional paid-in capital | 28,829 | 28,696 | ||||||||
| Accumulated deficit | (24,855 | ) | (25,306 | ) | ||||||
| Total shareholders’ equity | 4,505 | 3,905 | ||||||||
| Total liabilities and shareholders’ equity | $ | 14,784 | $ | 17,946 | ||||||
| Certain minor reclassifications have been made to our prior period financial information in order to conform to the current year presentation. | ||||||||||
| HEI, INC. | ||||||||||
| STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||
| Three Months Ended | ||||||||||
| March 29, 2014 | March 30, 2013 | |||||||||
| (In thousands, except share and per share data) | ||||||||||
| Net sales | $ | 5,944 | $ | 12,516 | ||||||
| Cost of sales | 5,953 | 10,491 | ||||||||
| Gross profit | (9 | ) | 2,025 | |||||||
| Operating expenses: | ||||||||||
| Selling, general and administrative | 814 | 1,135 | ||||||||
| Operating income (loss) | (823 | ) | 890 | |||||||
| Interest expense, net | (68 | ) | (90 | ) | ||||||
| Other income (expense), net | (5 | ) | (150 | ) | ||||||
| Income (loss) before income taxes | (896 | ) | 650 | |||||||
| Income tax expense | - | 14 | ||||||||
| Net income (loss) | $ | (896 | ) | $ | 636 | |||||
Income (loss) per common share: | ||||||||||
| Basic | $ | (0.09 | ) | $ | 0.06 | |||||
| Diluted | $ | (0.09 | ) | $ | 0.06 | |||||
Weighted average common shares outstanding: | ||||||||||
| Basic | 10,435,657 | 10,180,352 | ||||||||
| Diluted | 10,435,657 | 10,180,352 | ||||||||
| Certain minor reclassifications have been made to our prior period financial information in order to conform to the current year presentation. | ||||||||||
Contacts:
Mark B. Thomas, CEO, 952-443-2500
